Saab Press Release: Swedish Automobile Issues Subscription Notice Under GEM Facility

Swedish Automobile Issues Subscription Notice Under GEM Facility

Trollhättan, Sweden: Swedish Automobile N.V. (Swan) announces today that it issued a subscription notice for 4 million shares under the current EUR 150 million equity facility between Swan and GEM Global Yield Fund Limited. The exact number of shares to be issued and the price thereof will depend on the pricing period which commences today.

Swan and Saab Automobile AB continue their discussions with parties to obtain further short-term funding to be able to restart and sustain production.

SU commentary: To me this is a plan B. It looks like Saab is taking measures to be able to pay the August wages, just in case plan A can’t be fulfilled fast enough.
This is my personal assumption and not a fact.

jouni72
Member
5 years 1 month ago

Whatever we might think about this, it shows that GEM believes in Saab`s survival.

skwdenyer
Member
5 years 1 month ago

I don’t think it does; my understanding of the deal is that, under the contract, GEM is compelled to buy the shares. The higher the risk (as reflected in a low share price), the lower the price paid per share.

jouni72
Member
5 years 1 month ago

Yes but they buy shares which are worthless if Saab goes under? Sorry if I have understood this wrong…

BoeBoe
Member
5 years 1 month ago

GEM immediately sells the shares. They also get a huge discount on them.
And because the price they have to pay is based on the price at the end of a trading day they dump a lot of shares on the market at the end of each trading day. In that way they have to pay less and make a bigger profit.

Kurt Schirm
Member
5 years 1 month ago

@BoeBoe
SWAN is a very very thinly traded stock. Especially with the current news and uncertainty, i find it extremely unlikely (probably impossible) that GEM would be able to dump 4 million shares in the same trading day. I would also be somewhat surprised if there weren’t some type of hold clause and some type of “dumping” restriction in the agreement.

GrumpyGriffin
Member
5 years 1 month ago

Not that thinly traded, 2.75 million shares traded today out of a total number of 18.48 million, SWAN shares regularly trade at more the 1.5 million in a day, the day traders seem make a good living out of Saab’s predicament! 4 million shares could be moved in around a week!

skwdenyer
Member
5 years 1 month ago

How many shares does SWAN have to issue to GEM before EIB gets involved on an ownership question? Can VA (or somebody else) quietly buy up GEM’s stake?

I’ve said it before, but I take my hat off to VM for having secured this deal with GEM. I’m sure GEM don’t like it, but basically this is a get-out-of-jail-free card for VM. It is expensive, certainly, but it is a brilliant deal to have as a backstop.

goose
Member
5 years 1 month ago

it was my understanding from fellow commenters here on this site that GEM is probably not keeping the shares but onsells these straight away. I recall that someone posted an interesting theory how these type of investments work. If this is the case GEM’s stake would not increase.

Belfast_Saab
Member
5 years 1 month ago

And hopefully as RedJ says, ther is a Plan ‘A’ progressing in the background – this is obviously a very short-term solution to day-to-day cash problem, but not dealing with supplier issues.

KarlR
Member
5 years 1 month ago

Red J, I think its 9%

BoeBoe
Member
5 years 1 month ago

I thought it was every 5% change.

Troels, Denmark
Member
5 years 1 month ago

At least this shows that VM and Saab have not given up! 🙂
Hoping for a plan A – and a real, stable solution to come soon, so production can restart and confidence be rebuild … 🙂

Grumpy
Member
5 years 1 month ago

Unless the whole organization is geared to start production on the 29th I fear this is a futile gesture. Yes it is great that VM secures funds for salaries and wages but I don’t think they can afford to dealy production by a single day.

It is crunch time Saab. Saab UP!

BoeBoe
Member
5 years 1 month ago
People, GEM does not “believe” in SWAN. They are like vultures circling above almost bankrupt companies. They buy these shares with a huge discount (below the share price) and start dumping them on the market. They have done this for a lot of other Dutch companies which now are bankrupt. They already sold (almost) all the 5 million shares they got 2 weeks ago. And they would have to because those shares would be a 17% shareholding in SWAN. And the EIB etc have to approve every step of 5%. I’ll try to explain the “GEM method” in more detail… Read more »
GrumpyGriffin
Member
5 years 1 month ago

The lender of last resort!

TonymacUK
Member
5 years 1 month ago

If it`s necessary to use the GEM facility to pay August salaries, how are earth can production re-start week 35?
(Grumpy, we may have to crack a bottle of Malt to commiserate or celebrate, SAAB up!)

GrumpyGriffin
Member
5 years 1 month ago

Lets hope that this is the last of the GEM funding exercises and that they get a proper investor on-board in the next couple of weeks, though who would want to is the big question?

BoeBoe
Member
5 years 1 month ago

If they want to use GEM to pay the August salaries they will need to issue a lot more shares.

The salaries are 11 million Euro and if we assume that the shareprice stays around 1 euro they will need to issue at least 12,5 million shares to GEM. Don’t forget that GEM gets a huge discount on the shares they buy.

Joe___
Member
5 years 1 month ago

DI points out that this may be a way to let in Antonov through the back door, since GEM is free to sell their Saab shares to whoever they like.

Khrisdk
Member
5 years 1 month ago

I think that’s one for BoeBoe to answer

BoeBoe
Member
5 years 1 month ago
That is not possible. When somebody has a shareholding in SWAN that is bigger than 5% they have to tell the authorities in The Netherlands (www.afm.nl) and also every next step of 5% triggers a notification. And why should Antonov buy these shares now? He could always buy shares on the stock market. But he did not do this because of the “5% rule” and because if the did so the money he paid would not go to Saab/SWAN but to the previous owner of the share. SWAN can sell a share only 1 time. And in this case they… Read more »
Khrisdk
Member
5 years 1 month ago

Thank you

Ijust wanted someone not tainted by too much enthusiasm to point out that Di.se, theat great swedish industry newspaper don’t have a clue, and just for good measure that they made the same mistake last time

fuzzi
Member
5 years 1 month ago

Does anybody know how is now the actual proportioning of all shares of SWAN ?

BoeBoe
Member
5 years 1 month ago

http://www.afm.nl and search for Swedish Automobile.

kaiger
Member
5 years 1 month ago

http://inside.saab.com/saab-decision-on-frankfurt-motor-show/

Sadly…but I expected this cause it was tooo quiet about the possible presence in Frankfurt the last weeks. However another missed “yes, we are still here”-chance for possible customers.

Pedro
Member
5 years 1 month ago

I agree 100% with what is written in “SU commentary” lines after the post.

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